De Groote Financial Group April 14, 2022 No Comments

Week Ending April 8th, 2022

Highest since…A phrase we should all get accustomed to.

What does it mean – We are about to see the highest rate of inflation since the 1970s and the last report and the report before that and so on and so on. Yes, 2022 has a theme and it is going to continue.

Treasury Yields up sharply…According to the Federal Government, consumer inflation is just shy of 8%.

What does it mean – The Federal Reserve is signaling that it will be shifting from the role of the overly active buyer to the increasingly passive participant and eventually a seller. Below is a look at Treasury Yields:

University of Michigan Consumer Sentiment…Continues to fall.

What does it mean – Rising inflation is eating away at consumer sentiment. Consumers are feeling the pinch of inflation, taxes, bureaucracy, and now higher interest rates. The below chart is looking a lot like the previous drop.

Policy matters…California introduced new regulations for the trucking industry that would worsen the supply chain and hurt industry throughout the country.

What does it mean – According to CA State Representative Michelle Steel, “This is the result of bad policies from DC and Sacramento that are restricting the truck industry and contributing to the congestion felt at our ports.”

According to the new regulation imposed by the California Air Resources Board, over 17% of all trucks will have to be removed from the roads in CA as they were built before 2010. That is just over 80,000 trucks that will become illegal to drive in CA. If you thought the supply situation is bad now, just wait a few months. Not to mention if you work for a small trucking company or run your own trucking company you are being put out of work or business by big trucking corporations and government regulation. According to Joseph Rajkovacz, director of government affairs and communications at the Western States Trucking Association, “it is typical for large corporations to turn over their fleet every 3 to 4 years”. He goes on to say, “that these used trucks end up in the marketplace and absorbed by the small business community.” You think we have a problem now, wait until we have fewer trucks on the road.

These policies will increase the cost of everything we touch and use. Trucking companies that can afford to purchase new vehicles will see demand for used trucks skyrocket forcing transportation and distribution costs even higher and ultimately costing you, the consumer, more. You can expect more trouble with the supply chain due to this draconian policy forced by extreme environmentalists, government officials pandering to big businesses, and unions supporting bills like AB5 that are destroying the entrepreneur and independent trucker when we need them the most.

Policies like AB5 and regulations coming out of Washington are killing jobs and absolutely a business killer. This will lead to higher inflation across everything you eat, consume and touch. If you are a small business owner be prepared to shift your model.

Start here – Call the CA Governor, your congressman, State Representative, and Senator now!! Demand them to stop the crazy.

Here is Gavin Newsom’s number: 916-445-2841. If you need your Congressman or Senator’s number, please feel free to reach out to my office. We will be happy to get it for you.

Big banks punish small businesses…Big banks only approve 14.7% of loan requests in February down from over 60% in 2020.

What does it mean – Liquidity everywhere but, in the area that drives jobs and fosters the American Dream. Lending practices by big banks go hand in hand with big government and big business. Yet, the Chamber of Commerce is silent.

Local businesses suffer. Large corporations enjoy cheap money and small businesses struggle with loans that range from 7% to 13% according to Lending Tree. Between mandatory minimum wage, an increase in regulation under this administration, and rising inflation and interest rates, the engine of the American economy is sidelined by a bad policy that increases the cost of the American Dream.

The question is, will the 2020s react like the 1980 ensuring another 50 years of peace and prosperity and record business creation under policies that freed the entrepreneur and reduced regulations?

Let’s roll America,

Doug De Groote, CFP®, MBA, CTC Managing Director

De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure, and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.
Disclaimer: This article is solely for informational and educational purposes only and contains information that is not appropriate for everyone. Nothing herein should be construed as the provision of personalized investment advice. This article does not provide legal, tax, or accounting advice. Before making decisions with legal, tax or accounting ramifications, please consult the appropriate professionals for advice that is specific to your situation. Your experience may vary according to your individual circumstances and there is no guarantee that the views and opinions expressed herein will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. This article should not be regarded as a complete analysis of the subjects discussed.

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